"Product change in progress. If you are looking for a specific item, please ask a nearby staff member."
Signs bearing that message were posted across the shelves of a Homeplus store in Mapo-gu, Seoul, visited Thursday afternoon. The notices reflect a growing list of products the chain can no longer sell as payment delays to suppliers mount. Finding a staff member to ask about them, however, proved nearly impossible — only after a lengthy walk through the store did a reporter manage to locate two employees.
Homeplus is hemorrhaging workers. Staff departures accelerated after Seoul Bankruptcy Court ruled Thursday to terminate the retailer's court receivership proceedings. With indirectly employed contractors who handled parking, cleaning and facility management now out of work, directly hired staff have been left to absorb those duties on top of their own.
The staffing gaps were visible throughout the store. A restroom cleaning log that had been filled out daily showed no entries since Thursday. "Resignations and people taking their remaining leave at the same time have left us very short-handed," said one employee, identified only as A.
Fear of unpaid severance has driven much of the exodus. Homeplus operates both a defined-benefit (DB) and a defined-contribution (DC) retirement pay system. The DB plan's funding ratio has fallen below the legally required minimum of 100 percent, dropping to the low 70 percent range this year, according to sources. "Rumors spread that workers might not receive their severance pay if the company goes bankrupt, and resignations started piling up," said Ahn Su-yong, head of the Homeplus chapter of the Mart Workers' Union.
Even as it grapples with a staffing crisis, Homeplus has been running steep discounts. Coffee machines and some Lego sets originally priced above 100,000 won ($66) were on sale for 100,000 won, and many products under the chain's Simplus private-label brand were marked down by as much as 50 percent. A 34-year-old shopper surnamed Lee said she had come specifically because of the sale notices. "I'm focusing on the items with the biggest discounts," she said. Another customer, identified as B, who visited with her daughter, expressed disappointment, saying the shelves looked emptier than before. During the evening rush, long checkout lines formed at one point — only two of five staffed registers were open, and the self-checkout machines bore signs reading "System under maintenance."
Some in the industry have raised the possibility that Homeplus could suspend operations as soon as this weekend. Deliveries of fresh food and alcohol — two major product categories — have already been arriving late or not at all, compounding the staff shortage. Safety concerns have also emerged as facility management workers disappear. The mandatory rest day for hypermarkets this month falls on Sunday, July 12, fueling rumors that Saturday could effectively be Homeplus's last day of trading.
Homeplus must secure 200 billion won in operating funds by July 20 to file an immediate appeal with the court; failing that, it will enter bankruptcy proceedings. Selling off store properties to raise debtor-in-possession financing has been floated as an option, but negotiations remain deadlocked as Meritz Financial Group, the largest creditor, insists on full debt recovery. A Homeplus spokesperson said the possibility of a shutdown this week was "a claim made by the union side," adding that efforts to secure operating funds "are still ongoing and nothing has been decided."
siuu@heraldcorp.com
